Analyst issues discount price warning reports on a warning issued by
industry analyst Colin Sebastian of Lazard Capital over discounts to "AAA" games
over the holiday season, pointing to a $10.00 price reduction for Call of Duty:
World at War as in illustration of a possible trend, saying: "we believe a USD
10 discount on one of the industry’s top holiday releases highlights the risk of
lower software pricing moving into the New Year." Obviously the "warning" part
applies to the business side of things, as consumers will welcome price cuts,
but as for business, as a result, Lazard has cut its earning estimates for
Activision Blizzard by about 10%, though Sebastion remains more bullish on them
than their competition: "To put our new estimates into perspective, the combined
change to EPS from our two recent revisions is -10 per cent, compared to a -40
per cent revision in estimates for Electronic Arts and THQ, and consensus
estimates for Take Two declining by more than 90 per cent last week."

No they're not. Though MS charges a per unit sold royalty fee, the publishers set their product's MSRP.

Yeah, you know all about product pricing and "unfair" prices ... by your own experience I gather.Oh tell us when the whole world was in a big conspiracy to strip your precious game to bargain bin pricing... should be an interesting read.

there's a huge shakeout occuring in all of the major game studios (except Blizzard with their cashcow WOW) and the global economy is in a steep downtown. I fully expect to see retail prices of games go back to 50 bucks but I also expect to see far far fewer new games come out too. I'd love to see smaller developers win in this scenario by making 2D games filled with interesting gameplay (and that dont require the expense of motion-captured actors to make) but who knows.

Why sell a million units at $50 a pop when you might sell several million at $20 or $30 a pop instead? You're more likely to do better sales overall at a lower price point. And 100% of something is better than 100% of nothing.

"During times of universal deceit telling the truth is a revolutionary act."

Makes about as much sense as EA and Take 2 bleeding money amidst record revenue.

The thing is, I get more enjoyment from low-budget games like World of Goo and Sins of a Solar Empire than AAAAAAA ultra-budget games that I play once and then promptly forget about. Defense Grid: The Awakening cost me $20 and I see myself playing it on and off for months -- that's value right there. It probably didn't cost $12 million to make, either.

I would rather see a studio make a Baldur's Gate-like RPG for <$1 million than an high-budget RPG with the latest graphics but with only a fraction of the gameplay for $20 million.

They can't raise the price without adversely affecting sales, and yet they are grossly inflating their development budgets into the tens of millions of dollars. Make any sense?

Nope. The games industry seriously needs to rethink its approach or more developers and publishers will go down the drain. You can't sustain a company by spending $20+ million on every game and hoping it sells. You need to balance your offerings between niche and mainstream audiences. Save the big budget games for the mainstream and the lower budget stuff for the niche. That way, you appeal to both demographics and allow yourself to take more risks. Hollywood learned this a long time ago.

It's almost surreal how companies openly acknowledge that the 50 to 60 dollar range is the maximum nominal price point, yet they continue to balloon their development budgets into the stratosphere.

Hmmm. Let's see. Considering that $50 is more like $32 today as compared to the early 90's, the sales dollars they do make aren't going as far. They can't raise the price without adversely affecting sales, and yet they are grossly inflating their development budgets into the tens of millions of dollars. Make any sense?

“The greatness of a nation and its moral progress can be judged by the way its animals are treated.” - Mahatma Gandhi

I don't understand why games cost the same now as they did 20 years ago considering inflationary pressures. Games today often have a lot more content these days too. Considering production values have gone up a lot, I'm surprised these game companies can stay afloat.

They're moving MANY more units now than they ever were 20 years ago.

Also, with console games at $60, I find that I very rarely buy them and tend to stick with smaller purchases on XBLA. $50 is definitely more palatable.

He means more everything. More art assets, more detail, more code, etc. Just more stuff overall. If you're not seeing that, then I don't know what to tell you.

From a technical standpoint, yeah, modern games have more content. From a gameplay standpoint? Not so much. Really short campaigns, minimal depth, increased streamlining and automation... the list goes on and on. The problem is that because so much time is put into graphics and other aesthetic features, less and less time is put into iterating gameplay, writing, etc. For example, Planescape Torment had tons of dialogue. The likelihood of any modern game having that much dialogue is practically zero because every line would have to be voice-acted. Back in the day, you could just go back and rewrite lines whenever needed. Now, you're pretty much stuck once you've already recorded the voices. Similarly, adding a new quest, NPC, weapon, etc, was feasible even late in the project. Now such additions require huge investments of time and simply aren't plausible. Once you reach alpha, that's it.

Another good example is Bioware. The Baldur's Gate games had tons of content from a gameplay standpoint. You could play them for 100+ hours. Bioware's more recent games, on the other hand, are far more linear and are, at most, 40 hours long. From a technical standpoint, Jade Empire, KotoR and Mass Effect all have more content than BG1/2. From a gameplay standpoint, they aren't even close.

This is exactly why Steam has been getting more and more of my business lately. They actually have sales and deals that get me interested in the games. I hadn't considered buying stalker until it was $5, in which case it became a no brainer. They offer packs of older games at aggressive prices. Their sales also spread word of mouth about the game.

Agreed. I look forward to the new Steam Deal every Friday, hoping something I don't already have comes up. Lately it's mostly been games I already have, but I did get Spellforce 2 and expansions for $15 a few weeks back. I have had my eye on Spellforce 2 for quite some time, but could never justify the $30 or $40 as I wasn't sure when I'd play it.

For the right price, I've been buying games on Steam I already own, or pirated back in the day, but also trying some other games I would have skipped altogether.

I think a big part of the problem is the industry doesn't discount their less than AAA titles. They release a lot of games that aren't bad, but aren't really worth investing $60 into. Most people refer to these as bargain bin games, but I don't see these games start to drop price nearly soon enough. Seems like the game industry is trying to keep copies of year old games at $10 less than full price more than ever. I would personally buy a heck of a lot more games if their price reflected how good their value. Yes, you get a lot of content with games, but that doesn't mean the content is good. $50 is a decent investment. You can purchase 4-5 extremely good movies on DVD for that (you can still get movies for $9.99 as long as you buy a basic version and the movies hasn't just hit DVD.)

In summary, I would love to see the mediocre titles (and there are a lot of them) drop in price a bit sooner. Bargain bin quality titles really shouldn't carry a AAA quality title price. Even dropping the price $10-15 on their not quite AAA title after a few months could help move product.

This is exactly why Steam has been getting more and more of my business lately. They actually have sales and deals that get me interested in the games. I hadn't considered buying stalker until it was $5, in which case it became a no brainer. They offer packs of older games at aggressive prices. Their sales also spread word of mouth about the game. Many gamers don't trust reviews anymore, with good reason. Having a friend purchase a game and say "this is actually pretty good" means a heck of a lot more than a game review.

"The price should go up for the best, $60-$70 games should be the new trend for the best of the best games, those are the ones I would want to buy."

And what constitutes the "best games"? There's no telling that a game will sell as the publisher wants; granted games like GTA and Gears will sell like gangbusters, but does that make them the best? Little Big Planet was to be one of the best (and still is in many ways) yet hasn't sold for SHIT in the US (250K from what I remember). Putting a premium price on a potentially good game is only going to make people wait until the price matches the perceived value; something Sony learned quickly with the launch of the PS3.

You bring up a good point, but there should be some segregation from 4 star titles. A 4 star developer with a 4 star record should be worthy of coming to market with a higher expected price and value.

Including some craptastic game that was made to debut with some movie, made by some unproven developers should not be placed in the same category as 4 star games made by the best in the industry. Yet, due to the box art and the name and flash, they are placed on the same level and can sell just as well to the undiscriminating by marketing. Everyone has an opportunity to make money, but the best games are not always the best sellers, we as the players all know this to be true. If we are only concerned with making the best sellers, then games are doomed and people will be duped into buying things that aren't worth the nickel.

I believe the best devs and 'best' games should have opportunity to make more money from the gate because of their track record and proven attention to quality. All games are subjective as to what is best but there is usually some consensus on incredible production quality, innovation and high polish. You can probably name some of the developers off the top of your head that take that high road rather than pump out games and jump on the next 12 month dev cycle for some movie tie in.

I have no desire to need something new because it's just new. Everyone likes that on some level but I rather have quality than quantity any day. It's hard to try and be productive in society and play new games all the time, I just want the best and I am willing to reward devs for it, and for them not succumbing to the minimalistic path.

In my mind the problem for devs is that the costs of production have soared. It seems absurd that games have gotten exponentially more complicated and yet the development tools have not evolved anything like on par. Sometimes I think they moan so much about piracy because they can really see the size of it now, and it's all too easy to think of all those lost sales (even if 1:10) as the silver bullet that could turn the industry into something that could have the reliable expectation of some profit, like other industries have. Online sales should be helping out from a reduced retailer's margin, but I'm not sure that's happening (I think Steam take a big cut except for flagship games that they really want on the service).

Yes. Production costs are now in the tens to hundreds of millions USD. Some studios have 100-250 million dollar budgets. Those numbers don't look to be coming down anytime soon. Every generation of technology increases the amount of work that needs to be done exponentially, and unlike the film industry, we don't get anything for free. Everything has to be created for a game. Every sound, every motion, every piece of geometry, texture, lighting, we have a black canvas that needs to be filled with light. Add into that that more and more systems are a requirement now. You can't make a game without physics. Ragdoll no longer cuts the mustard. There's more and more demand for customization of the player's avatar. You guys rip apart a game like Crysis, but then expect every game after it to look at least as good.

So yeah, we get a little nervous when we start thinking about the ballooning budgets, time, and resource requirements all based on a static price point...hoping that the market has grown enough that we'll sell enough copies to make up the difference. Meanwhile, piracy is on the rise...and the numbers were pretty staggering before. Who knows how many lost sales piracy really translates into. All I know is that it confuses the shit ouf the issue, and it's not helping me pay my electrical bill...so there's nothing good about it from my point of view.

Something has to give. If things keep going in the direction they're going now either the price of games will shoot up, games will shift to an online model to curb piracy (which may or may not do anything useful), or you're going to see a huge shift by the publishers to fall back on just churning out the next version of whatever's sold well, period. Not talking about publishers favoring another Madden or GTA game...I'm talking about that's all you're going to see on the shelves.

What really slays me is that we're all slaves to the people with the money...the publishers. It's every development studios dream to reach the point where they can sell enough copies of a game that they can become another Vavle, Blizzard, Epic, etc. and have the freedom to actually make the games they want to make rather than cowtow to the publishers, who's main concern is making a profit off of the huge risk they're taking via investment into developing a new game. That can't happen if people aren't paying for the games they're actually playing. We can't sort the wheat from the chafe. The studios that make good games will never be able to step out from the shadow of the publisher and they won't be able to take the steps forward to make better games. They're more likely to end up closing down...while the publishers just sally on.